April 18, 2006 > Lam Research stock rises on strong earnings

by AP Wire Service

NEW YORK (Dow Jones/AP), Apr 13 _ Lam Research Corp. stock rose Thursday in the first day of trading after the company posted earnings that beat Wall Street's expectations and said it sees sequential order growth.

Shares of Fremont, Calif.-based Lam rose $2.06, or 4.6 percent, to close at $46.77 Thursday on the Nasdaq Stock Market.

"Clearly the company continues to execute on the operations side, with the only real concern now being the direction of the cycle," Lehman Brothers analyst Christopher Muse wrote in a research note.

The supplier of wafer fabrication equipment after the bell Wednesday said it earned $86.3 million, or 60 cents a share, on revenue of $437.4 million in the fiscal third quarter ended March 26.

Excluding items, Lam Research said it earned 65 cents a share.

In the same period a year earlier, it earned $59.5 million, or 42 cents a share, on revenue of $349 million.

Analysts were expecting earnings of 62 cents a share, according to Thomson Financial.

Also, Lam expects orders to rise 5 percent to 10 percent in the fourth quarter and sees revenue of $490 million to $510 million.

Lehman's Muse, who rates the stock at "overweight," said short term investors should wait on the sidelines for a better buying opportunity.

Banc of America analyst Mark F. Fitzgerald also cited concerns that NAND price declines, iPod production costs, weak PC demand, will cause the chip industry in the second half to cut orders.

Fitzgerald, who rates the stock at "neutral," doesn't own any shares in the company, but Banc of America makes a market in the stock. Muse doesn't own any Lam Research shares, but Lehman makes markets in the stock.